Xbox Series X/S demand drives a 16% jump in gaming revenue for Microsoft

Microsoft’s gaming business has reported an increase in quarterly revenue driven by ongoing demand for Xbox Series X/S consoles.

On Tuesday, the company published its results for the first fiscal quarter ended September 30, 2021.

In line with expectations, total gaming revenue was up 16% compared to the first quarter of the previous fiscal year.

Xbox hardware revenue increased 166% year-over-year, driven by demand for Series X/S, which had yet to launch during the comparable reporting period a year earlier.

Microsoft said Xbox content and services revenue was up 2% “on a strong prior year comparable, with growth in Xbox Game Pass subscriptions and first-party titles partially offset by declines from third-party titles”.

During Microsoft’s quarterly earnings call on Tuesday, CEO Satya Nadella claimed the company’s gaming division “saw record first quarter monetisation and engagement”.

He added: “This holiday season will bring our biggest line-up of content and exclusive games ever, with three new triple-A titles including Halo Infinite available via the Xbox Game Pass subscription service, which continues to offer the best value in gaming.”

Chief financial officer Amy Hood also provided an outlook on Microsoft’s gaming business for the current quarter ending on December 31, 2021.

“In gaming, on a high prior year comparable that included the launch of our new consoles and strength across Xbox content and services, we expect revenue growth in the high single digits,” she said during Tuesday’s earnings call.

“And in Xbox content and services, we expect revenue growth in the mid-teens with strong engagement on the Xbox platform in a holiday quarter that will include several triple-A title launches.”

Hood also said she expects “console sales will continue to be impacted by supply chain uncertainty.”

Related

1

Xbox boss Phil Spencer says console supply issues will continue into 2022

“It’s going to be a challenge that we’ll work through for quite a while”

Xbox Game Pass attracted fewer new subscribers last fiscal year than Microsoft had targeted, it was recently revealed.

According to a financial document filed by Microsoft this month, the number of Xbox Game Pass subscribers grew by 37.48% during the year ended June 30, but the company had targeted an increase of 47.79%.

The subscriber growth target is one of several performance goals (although the only pure gaming one) tied to top Microsoft execs’ stock compensation.